Disequilibrium State

Disequilibrium State

Disequilibrium, a state of unbalance between economic forces leading to change. If a small disturbance is introduced into a given situation, and if after the introduction the original equilibrium is restored, equilibrium is said to be stable. Equilibrium is unstable if a small disturbance does not restore the original situation. Disequilibdum occurs when forces exist in the situation which cause it to change. Thus demand and supply are in equilibrium when the quantity demanded equals the quantity supplied at a given price. If the conditions of demand, or supply, or both change, there is disequilibrium for a time. A disturbance has been introduced winch will normally cause movement to different position of equilibrium.

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